Common Mistakes Made by a Los Angeles Damage Expert

By: ValueEconomics


A Los Angeles damage expert is someone that helps business owners in their Los Angeles business valuation. Also in a case of damages, the damage expert can help to quantify the amount of damage that was done. However, we carried out a research on the mistakes that are common to a Los Angeles damage expert. And in the cause of the research, we discovered some mistakes that are mostly made by a Los Angeles damage expert. In this article, we will be pointing out some of the common mistakes that we found. Read further to discover them.

Some common mistakes made by Los Angeles damage expert

Below are some of the mistakes that are common to Los Angeles damage experts:

Underestimation of cost

Sometimes, a Los Angeles damage expert prepares a damage calculation that undervalues some costs that were side-stepped. But then, they are in favour of the defendant’s actions. Such costs can include insurance, maintenance, advertising, labour, and so on.

In the process of calculating for lost profits, the expenses directly in relation with the damaged asset should offset the revenues that were lost. In a case where the revenues that were lost are in relation with a business unit, the Los Angeles business valuation analyst has to assign every variable cost. Also, there are cases where a fixed cost is related to a specific revenue source. Such expenses are best determined by checking the financial record of the company. Or try to get the benchmarking information for establishments that operate similarly.

Inappropriate use of statistics

When checking for lost profits, you can make use of statistics to give a good support for your assumptions. Nonetheless, making use of statistics in an improper way can be very risky too. For instance, an opposing Los Angeles damage expert supported a statistical relationship with a correlation coefficient. But the damage expert failed to derive the correlation coefficient. He assumed a correlation coefficient of 0.50. With this, statistics has been used in an inappropriate way. And it might lead to a failure.

Unsubstantiated missing revenues assumption

This is one of the most common mistakes that a Los Angeles damage expert makes. In a case where you want to prepare revenue forecast to analyse the lost profits, it is expected that you carry out the exact detailed analysis that is expected in the process of a Los Angeles business valuation. This point to the fact that you have to understand the present economic condition, the competitive factors, and the growth prospects for the firm, and many other relevant factors. Making unsupported assumptions only shows that they lack the understanding of the industry the firm is trying to fit in.

Not procuring all essential documents

It is important to get all essential documents before trying to do any damage analysis. In some cases, the attorney will only accept just the documents that he or she thinks is needed to do the damage analysis. And in such cases, the Los Angeles damage expert becomes helpless. Therefore, it is important that you procure all essential documents before carrying out any damage analysis.

Conclusion

We have pointed out some of the common mistakes of a Los Angeles damage expert. It is important that you know all these mistakes so as to be able to avoid them. Good Luck!

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Valu Economics provides financial and economic expert Los Angeles, CA. We provide litigation expert witness analysis and testimony. Contact our Litigation and California Los Angeles financial expert witness.

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